House Wants to Defend CFPB if Supreme Court Takes Up Case
Attorneys say courts have recognized that in order to “shield” certain agencies, a degree of independence is needed.
With the Trump Administration declaring the structure of the CFPB is unconstitutional, the House is riding to the rescue of the single-director agency.
The House is requesting that if the Supreme Court accepts a case dealing with the agency’s structure, House attorneys be permitted to defend it.
“By not defending the consumer bureau’s independence, the Trump Administration is choosing special interests over America’s consumers,” House Speaker Nancy Pelosi (D-Calif.) said.
The Trump Administration has long said that the agency’s structure, established in Dodd-Frank, is unconstitutional because it is governed by a single director who may only be removed for cause.
Until recently, the CFPB has defended the agency structure. However, Director Kathy Kraninger, a Trump Administration appointee, recently abandoned that effort in a suit filed by Seila Law.
In that suit, the CFPB had issued a civil investigative demand to Seila, a law firm, as part of its investigation into whether debt-relief companies were engaging in unlawful acts or practices.
The law firm challenged the constitutionality of the section of Dodd-Frank that created the CFPB, saying that the director’s position was unconstitutional.
The court sided with the bureau at the district and appellate level, but the law firm has asked the Supreme Court to take the case.
In its filing, the House noted that its Bipartisan Legal Advisory Group, made up of three Democratic leaders and two Republican leaders voted to allow the House to try to intercede in the suit.
The two Republicans in the group, House Minority Leader Kevin McCarthy (R-Calif.) and Minority Whip Steve Scalise (R-La.) voted against House participation.
“This case presents an issue of significant importance to the House: the constitutionality of the for-cause removal protection that Congress enacted to provide the CFPB Director with a measure of independence, consistent with the agency’s functions as a financial regulator,” the House’s attorneys wrote.
They said that courts have recognized that in order to “shield” certain agencies, a degree of independence is needed.
They said that the president still maintains control over the agency, since the director may be removed for failing to enforce the nation’s consumer laws.